More Awareness Needed for Non-Interest Financial Instruments in AfCFTA - Anatogu

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Friday, December 03, 2021 / 11:13 AM / By Bukola Akinyele-Yisau for WebTV / Header Image Credit: EcoGraphics


There is a need for more awareness of how non-interest-bearing financial assets can support the African Continental Free Trade Agreement (AfCFTA).


Mr. Francis Anatogu, Secretary of the National Action Committee (NAC) on AfCFTA, made this point while speaking on "Continental Trade and Investments: Championing Islamic Finance for Africa".


He noted that the AfCFTA is the biggest game in town and an agreement to reduce barriers, making exports from Nigeria to other African countries seamless.


He highlighted the elements of the AfCFTA to include;

  • Regulation of export duty for 90% affordable items
  • Promotion of local content
  • Harmonization of standards
  • The need for mutual recognition agreements for trade and services and other mutual agreements to engage makes it easier for Nigerians to trade.


Answering why the AfCFTA was critical to the continent and Nigeria, he referred to the devaluation of the naira over the past five (5) years and how it has affected  Nigerians. He also noted that Africa has a market of 1.2bn people, a $3.4trn economy and 650 items for import.


According to him, Nigeria's objective for implementing AfCFTA is growing its exports in Africa. The emphasis would be on non-oil exports as every state in Nigeria had the opportunity to export and become economically viable. Secondly, Anatogu stated that for Nigeria to be prosperous, it must produce what it can ship to be a competitive economy in Africa.


"We need an enabling environment for business, a policy framework that is export friendly, and integrates technology, infrastructure, warehouses, logistic, roads and power to boost Nigeria's productivity" - Anatogu added.


He said all these are key for people to be able to export. The last part was market access, a partnership designed to push products to the final consumer at the national and state levels with government support for the real sector. He said Islamic Finance instruments could support education. 


The Secretary, NAC on AfCFTA said implementing the letters of the agreement through institutional support was a key enabler to making sure that agreements work on the continent. He said this would involve proper coordination amongst the trade revenue authorities and customs.

   

He said Nigeria must be clear on what it wants to achieve with the AfCFTA,  which is to grow its export base by pivoting from oil to non-oil exports.


He believed Nigeria needs to give top priority to five areas, which include;

  • Attracting investments, which is a way of mobilizing capital
  • Improving national productivity which will require growth in human capacity.
  • We are improving processes from compliance, standardization to certification.
  • Improving the business environment and
  • Investing in infrastructure.


According to the trade expert, the objective of the AfCFTA was to enable Nigeria to scale in exports, adopt an ecosystem model and deepen collaboration. He believed that Islamic finance could support "Trade Finance" and the distribution of goods locally and in African markets.


Concerning the right ecosystem for Islamic finance to thrive in Nigeria, Anatogu explained that one critical gap is awareness. People need to know more about it and take advantage of the opportunities.


For Nigerian businesses to benefit from the AfCFTA, Anatogu noted that they need to understand where their products fit, take necessary steps and go to financial institutions which will help them access funds, as they meet all the risk management requirements. 


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